Attorney
and former Azusa Mayor Stephen J. Alexander was being held in MetropolitanCorrectionalCenter
last night in lieu of $250,000 bail following his indictment for lying on a tax
return.

Alexander
was arrested earlier in the day after being charged with failing to report as
income the money he allegedly took while helping former Los Angeles Superior
Court Judge Patrick Murphy and others conceal funds from their rightful owner.

Magistrate
Judge Andrew Wistrich set bond as requested by Assistant U.S. Attorney Angela
Davis, rejecting the defendant’s protestations that he couldn’t secure that
large an amount.

‘Risk
of Flight’

Davis
said she asked for the high amount because Alexander’s extensive personal and
business ties to Nicaragua,
and the fact that he faces discipline proceedings that threaten his law
license, create “a serious risk of flight.” Besides, as a lawyer and former
public official, Alexander should know people who would be willing and able to
secure the funds, the prosecutor told the MetNews.

Alexander
is to return to court on Tuesday to plead to the indictment, which alleges he
claimed less than $15,000 in income on his 1997 tax return even though his
total income that year was “substantially higher.”

Davis
confirmed that the charges are based on Alexander’s admissions, in the State
Bar proceeding and in a civil case in federal court, that he received funds
that year from Irwindale paralegal Maryanne Baumgarten and kept $200,000 for
himself.

The
prosecutor declined to say whether Murphy, who resigned from the bench while on
the verge of removal for abandoning his duties in 2001 and was disbarred
earlier this year, or anyone else, might be indicted on related charges.

The
MetNews reported in 1999, based on a document and other information obtained
from a confidential source, that Alexander had received more than $1.5 million
from Baumgarten, who once worked for Murphy as a paralegal.

The
document, allegedly prepared by Alexander, was an unsigned receipt reflecting
that a total of $1,5526,480 was received from Baumgarten between January and
June 1997. At the bottom of the receipt, the words “Commission for handling:
account of Stephen J. Alexander—$200,000” have been scratched out, and
alongside that language are Baumgarten’s handwritten initials and underneath
them the handwritten words “Not Authorized.”

Alleged
Gold Delivery

According
to the document, $85,530 was wired to “Crystal Bay Trading Company for Gold” in
June 1997. The receipt specifies that gold “was personally delivered to Judge
Patrick Murphy one week later.”

The
document goes on to indicate that a “Cashier’s Check” for $157,500 was “written
to Los Angeles Coin” on July 9, and that a check “was personally delivered to
Judge Patrick Murphy” on that date.

In
court filings, Alexander confirmed that Baumgarten gave him the $1.5 million,
which Alexander claimed was to be invested in an offshore bank and insurance
company.

According to statements made in interviews and in court documents, nearly $2
million of funds belonging to Dr. George Taus, a friend of Murphy, were
transferred first to a Nevada corporation, then to an Encino attorney whose
participation was solicited by Murphy, and then, at Murphy’s direction, to
Baumgarten, who also allegedly acting on instructions from Murphy, entrusted
the funds to Alexander.

The Nevada
corporation, Copex, Inc.—which apparently existed only as a conduit for the
funds—allegedly released the money to Baumgarten as a supposed settlement of a
phony claim for sexual harassment and personal injury.

The funds are believed to have come from the liquidation of securities brokerage
accounts by Taus. The doctor’s former wife obtained an arbitration award
against the brokers, whom the arbitrator said were at fault in allowing Taus to
liquidate the accounts without her consent, in violation of her community
property rights.

The brokers then sued Taus, Murphy, Alexander, Baumgarten, and others. That
case eventually settled, as did a related suit by the trustee of Taus’
bankruptcy estate.

The
State Bar brought a disciplinary action against Alexander—who was Azusa’s
mayor from 1994 to 1997 and a candidate for the Citrus Municipal Court in
1996—in March. It accused Alexander of accused of helping Murphy and Baumgarten
divert the Taus funds.

In
the fall of 1997, Baumgarten filed a lawsuit and a State Bar complaint against
Alexander, claiming he took the $200,000 for his personal use. Alexander
responded to Baumgarten’s complaint with a letter claiming she was a
“go-between to protect the identity of investors” in the offshore venture, the
State Bar alleges.

The
letter claimed he took his directions from Murphy, and that his fee for
involvement in the venture was to be $300,000, but that he only took $200,000,
the State Bar said.

In his formal response to the State Bar
charges, Alexander called the allegations “half truths.” He said he took his
instructions from Baumgarten, that she agreed to his fee for his services in
connection with the venture, and that he wired the remainder of the funds to
Baumgarten’s sister as per her instructions.